Indian benchmarks snap a volatile session with good gains

Indian markets went through a hectic session on the first day of the June month as an assortment of reports popped through the day keeping investors in a dilemma and frontline indices in a sticky situation. On one hand, monthly auto sales and cement dispatches numbers kept the markets buzzing while on the other the HSBC PMI figures based on a survey of around 500 companies showed manufacturing activity in India in May slowing from a month earlier, yet output remained robust, reflecting the underlying strength in business conditions. Furthermore an official data released by the Ministry of Commerce showed that India's six core industries grew by 5.2% in April 2011 as compared to 7.4% in the previous month and 7.5% in the same month of last year. Another data released by the commerce ministry showed that India's trade deficit in April narrowed to $8.98 billion from $11.03 billion in the same period a year earlier, however, the trade deficit rose (month on month) to $8.98 billion in April from $5.6 billion in March. India's exports in April rose an annual 34% to $23.8 billion, while imports for the month rose 14% on the year to $32.8 billion, the official data stated. Leads from the global front too remained lackluster as Asian markets settled on a mixed note while the European counterparts got off to a flat opening and traded with a negative bias through the end of local trading hours. Amid all the pandemonium the benchmarks showed a sound performance and managed to snap the second straight session in the positive terrain. The NSE's 50-share broadly followed index Nifty, shut shop with over half a percent gains just below the crucial 5,600 support level while Bombay Stock Exchange's Sensitive Index, Sensex slammed a century and closed above the psychological 18,600 mark. By the end of trade, the broader markets showed a better performance than their larger peers as the midcap index advanced by 0.82% and the smallcap index climbed 0.87% points. Aviation stocks were in the spotlight since the start of trade as all the aviation scrips reacted on reports that state-run oil marketing companies have cut jet fuel prices by about 4%, effective today, 1 June 2011. At the close, Jet Airways, Kingfisher Airlines and Spice Jet gained in the range of 1-1.5%. According to the HSBC survey, strong expansion in new orders and output was also reflected in the purchasing activity, which quickened substantially during May, helping boost heavyweight stocks like L&T and Siemens which surged 2.33% and 1.83% respectively. However, inflationary pressures intensified as both input and output prices rose. Though, the sequential growth rate of input costs decelerated again, but the readings still remained elevated by historical standards. Better than expected sales number by Automobile companies like Maruti Suzuki, TVS Motor, Mahindra and Mahindra for the month of May boosted sentiment by easing fears that auto companies would not be able to maintain growth given the rising commodity prices and high interest rates. While rise in cement despatches of companies like ACC and Ambuja Cement helped the stocks spurt surge by 1.63% and 3.10% respectively. All stocks of the ADAG pack made their presence felt, particularly Reliance Communication and Reliance Capital which soared by 4.81% and 4.72% respectively.

On the global front, the Asian equity indices settled on a mixed note with the Taiwanese benchmark garnering around a percent point led by chip design house Mediatek after it announced a new tie-up with Yahoo while, smartphone maker HTC also ended higher amid investor optimism that it will add more market share after Nokia dropped key sales targets. The European equities are trading on a weak note as France's CAC fell 0.08%, and Germany's DAX fell 0.20%. On the other hand, the screen trading for US index futures indicated that the Dow could open on a flat note.

Earlier on Dalal Street, the benchmark got off to a positive opening as sentiments got supported by reports that Germany might drop its demands for an early rescheduling of Greek bonds, paving the way for a deal that could prevent Greece from defaulting on its debt. After the positive opening the indices went on to test the 5,600 and 18,600 levels in the morning session but profit booking at higher levels pulled the benchmarks down. Thereafter the indices gyrated in a tight band through the afternoon session but buying gathered greater momentum in the late hours of trade and ensured that the frontline indices go around the day's high levels with around half a percent gains. Market breadth remained positive as there were 1795 shares on the gaining side against 1005 shares on the losing side while 149 shares remained unchanged.

Finally, the BSE Sensex rose by 105.53 points or 0.57% to settle at 18,608.81 while the S&P CNX Nifty gained 31.85 points or 0.57% to settle at 5,592.00.

The BSE Sensex touched a high and a low of 18,636.12 and 18,514.66, respectively. The BSE Mid cap and Small cap index up 0.82% and 0.87% respectively.

The top gainers on the Sensex were Reliance Communication up 4.81%, NTPC up 3.43%, L&T up 2.33%, Bharti Airtel up 1.95% and Reliance Infrastructure up 1.81%.

On the flip side, Tata Motors down 1.19%, Tata Steel down 1.17%, DLF down 0.90%, Reliance down 0.53%, Bajaj Auto down 0.43% were the top losers on the index.

Meanwhile, the country's exports have witnessed good growth for the first month of the fiscal and expanded by over 34 percent in the month of April. However, exports growth was lower in comparison to the strong growth of 54 per cent in March. Consequently, the trade deficit rose to $8.98 billion in April from $5.6 billion in March and was lower than $11027.9 million during April 2010.India's exports grew a record 37.6 percent to $246 billion in the 2010-11 fiscal year that ended in March, as demand soared for engineering goods, oil products and gems manufactured in the country. Though, the imports in the 2010-11 fiscal stood at $350 billion, down by 21.6 per cent, and the trade deficit was $104 billion.

India's Exports during April, 2011 were valued at $ 23849.32 million (Rs 105819.43 crore) higher by 34.42 percent in Dollar terms and 34.03 percent in Rupee terms, than the level of $ 17742.13 million (Rs 78951.58 crore) during April, 2010. India's Imports during April, 2011 were valued at $ 32834.36 million (Rs 145686.06 crore) representing a growth of 14.13 percent in Dollar terms and 13.79 percent in Rupee terms over $ 28770.06 million ( Rs 128025.31 crore) in April, 2010.

Oil imports during April, 2011 were valued at $ 10185.9 million, higher by 7.7 percent than oil imports valued at $ 9454.0 million in the corresponding period last year. Non-oil imports during April, 2011 were estimated at $ 22648.4 million which was 17.3 per cent higher than non-oil imports of $ 19316.0 million in April, 2010. Engineering exports grew by a whopping 109%, electronic goods by 48%, gems and jewellery by 39% and petroleum and its products, plastics and linoleum by 30%. While imports of pearls and precious stones went up by 19% and gold imports rose by 60%. The government is targeting increasing exports in the current fiscal by at least 25% to $450 billion by 2013-14.   

The top gainers on the BSE sectoral space were Capital Goods (CG) up 1.38%, TECk up 1.06%, Public Sector Unit (PSU) up 0.96%, Power up 0.96%, and IT up 0.87%.

The top losers in the BSE sectoral space were Consumer Durables (CD) down 0.56%, Health Care (HC) down 0.36%, Realty down 0.28%, Oil & Gas down 0.13% and Auto down 0.08%.

The Index of Six core industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 276.5 (provisional) in April 2011 and registered a growth of 5.2% (provisional) compared to 7.5% registered in April 2010 and 7.4% in March 2011. During April-March 2010-11, six core industries registered a growth of 5.8% (provisional) as against 5.5% during the corresponding period of the previous year. The decline can be mainly attributed to weakness in cement output and lower finished steel production.

Crude Oil production having weight of 4.17% in the IIP registered a growth of 11% (provisional) in April 2011 compared to a growth rate of 5.1% in April 2010. The Crude Oil production registered a growth of 11.9% (provisional) during April-March 2010-11 compared to 0.5% during the same period of 2009-10.

Petroleum refinery production having weight of 2.00% in the IIP registered a growth of 6.6% (provisional) in April 2011 compared to growth of 5.3% in April 2010. The Petroleum refinery production registered a growth of 3.0% (provisional) during April-March 2010-11 compared to (-) 0.4% during the same period of 2009-10. Coal production with weight of 3.2% in the IIP registered a growth of 2.9% (provisional) in April 2011 compared to growth rate of (-) 2.9% in April 2010. Coal production grew by (-) 0.1% (provisional) during April-March 2010-11 compared to an increase of 7.9% during the same period of 2009-10. 

Though, Cement production having a weight of 1.99% in the IIP registered a negative growth of (-) 1.1% (provisional) in April 2011 compared to 8.8% in April 2010. Cement Production grew by 4.5% (provisional) during April-March 2010-11 compared to an increase of 10.5% during the same period of 2009-10.

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 4.3% (provisional) in April 2011 compared to 12.9% (estimated) in April 2010. Finished (carbon) Steel production grew by 8.2% (provisional) during April-March 2010-11 compared to an increase of 5.4% during the same period of 2009-10. During the same period, marginal decline was witnessed in Electricity generation, having weight of 10.17% in the IIP, registering a growth of 6.8 % (provisional) in April 2011 compared to growth rate of 6.9% in April 2010. Electricity generation grew by 5.6% (provisional) during April-March 2010-11 compared to 6.2% during the same period of 2009-10.

The government has recently decided to include natural gas and fertilisers in the list of core sector infrastructure industries. The new series, which will have data for eight key sectors, is likely to be released on June 10. The move will increase the weight of the core sector to about 37 percent in the IIP.

The S&P CNX Nifty touched high and low of 5,597.35 and 5,559.45, respectively.

The top gainers of the Nifty were Reliance Capital up 4.72%, Reliance Communication up 4.53%, NTPC up 4.01%, Ambuja Cement up 3.14% and SAIL up 3.06%.

On the flip side, Ranbaxy down 2.48%, Tata Motors down 1.65%, Sun Pharma down 1.56%, DLF down 1.21% and Tata Steel down 1.15% were the major losers on the index.

European markets were tradings lower. France's CAC 40 slipped by 0.08%, Britain's FTSE 100 down 0.19%, and Germany's DAX lower by 0.21%.

Most of the Asian equity indices finished the day's trade in the positive terrain led by Taiwan stocks which rose over 0.80 percent to a nearly four-month closing high on Wednesday, led by chip design house Mediatek after it announced a new tie-up with Yahoo while, smartphone maker HTC also ended higher amid investor optimism that it will add more market share after Nokia dropped key sales targets. However, Chinese index closed on a flat note as country's manufacturing expanded at the slowest pace in nine months in May as the government extended a campaign to cool inflation and the property market. China's official Purchasing Managers Index (PMI) fell to 52.0 in May from 52.9 in April.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2,743.97	0.50	0.02
Hang Seng	23,626.43	-57.70	-0.24
Jakarta Composite	3,837.76	0.79	0.02
KLSE Composite	1,556.42	-1.87	-0.12
Nikkei 225	9,719.61	25.88	0.27
Straits Times	3,172.87	12.94	0.41
Seoul Composite	2,141.34	-1.13	-0.05
Taiwan Weighted	8,062.35	73.51	0.82

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0jAwMTJxMHCw=